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Friday, June 14, 2013

How Obamacare Screws Low-Income Americans

Yesterday we reported that dozens of lawmakers and their aides are so afraid
that their health insurance premiums will skyrocket next year thanks to
Obamacare, that they are thinking about retiring early or just quitting. But there is a group who are truly feeling the effect of the higher premiums; low-wage workers. People such as employees at big chain restaurants, retail stores and hotels.

Because of a wrinkle in the law, companies can meet their legal obligations by offering policies that would be too expensive for many low-wage workers. For the employee, it's like a mirage -- attractive but out of reach.

The company can get off the hook, say corporate consultants and policy experts, but the employee could still face a federal requirement to get health insurance.

And the exchanges are simply too expenses.

Some supporters of the law are disappointed. It smacks of today's Catch-22 insurance rules.

"Some people may not gain the benefit of affordable employer coverage," acknowledged Ron Pollack, president of Families USA, a liberal advocacy group leading efforts to get uninsured people signed up for coverage next year.

"It is an imperfection in the new law," Pollack added. "The new law is a big step in the right direction, but it is not perfect, and it will require future improvements."

The law says companies with 50 or more full-time workers are required to offer coverage that meets certain coverage standards and costs no more than 9.5 percent of an employee's income. Failure to do so means fines for the employer. (Full-time work is defined as 30 or more hours a week, on average.)

But think about that for a moment, a family with an income of $21,000 a year, 9.5 percent of their income could mean premiums as high as $1,995. However a premium of $1,000 (close to the current average for employee only coverage) could be unaffordable for someone trying to live on $21,000/year.

Then there is the other issue. Many companies are reducing the the hours of these low-income people or replacing full-time with part time workers to avoid paying the higher health-care costs.

For example, WalMart Stores Inc.
is lowering its portion full-time employees to part-time status (40%-20%)
company critics say, which will have the effect of limiting
health insurance, even though the company is expanding coverage for its
part-time workers.

Schools
across Indiana are cutting back the hours of teacher assistants, bus
drivers, cafeteria workers and other aides to avoid having to offer them
health insurance under the federal health care employer mandate that
begins next year.”

“The
debate over the Affordable Care Act — or Obamacare — it is already
impacting some Michigan workers: Many part-time workers told 24 Hour
News 8 their hours are getting cut to avoid qualifying for insurance.
Russ’ Restaurant is among the local companies cutting back employee
hours due to the Affordable Care Act, saying that non-managing employees
can’t work more than 25 hours a week."

“Restricting
Its 3,300-Plus Substitutes To Working Less Than 30 Hours A Week.”
“McCoy Faulkner collects $81 a day as a substitute teacher in the Wake
County (N.C.) Public School System. A mere sub, he has no benefits. …
But instead of adding subs like Faulkner to its health care plan, the
school system is looking for ways to avoid doing so. Wake is considering
restricting its 3,300-plus substitutes to working less than 30 hours a
week, effective July 1.”

Companies which offered limited heath care plans for part time workers known as mini-med plans, are eliminating those plans as they don't meet the Obamacare requirements.

Darden Restaurants announced in February that its limited-coverage plans will also "go away after this year."

"We'd like to have the option to continue offering them, since they
are popular with our part-time employees, but the ACA doesn't offer that
type of flexibility," spokesman Rich Jeffers said. "There is still a
lot we don't know about the new health-care regulations for 2014, but we
are committed to helping all of our employees navigate through the new
environment as we learn more."

Universal Studios also.

Universal currently offers
part-time workers a limited insurance plan that has low premiums but
also caps the payout of benefits. For instance, Universal's plan costs
about $18 a week for employee-only coverage but covers only a maximum of
$5,000 a year toward hospital stays. There are similar caps for other
services.

Those types of insurance plans — sometimes referred to
as "mini-med" plans — will no longer be permitted under the federal
Affordable Care Act. Beginning in 2014, the law will prohibit insurance
plans that impose annual monetary limits on essential medical care such,
as hospitalization, or on overall spending.

Ah-- the unintended consequences of a government takeover of the nation's health system (or any industry).

According to those who created the governmental monstrosity, Obamacare was meant to make heath care affordable to all Americans. But in the end what it is doing is making heath care less affordable and possibly even lowering their income as companies switch jobs from full to part time to lower the expense of heath insurance--and it is harming the people who can least afford it--low income workers.